Harman Kardon 2008 Annual Report Download - page 54

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36
The proposed transition guidance requires retrospective application to all periods presented, and does not
grandfather existing instruments. FSP APB 14-1 is effective for us on July 1, 2009. We expect the effect
of adoption of FSP APB 14-1 to be dilutive to earnings per share.
Our long-term debt agreements contain financial and other covenants that, among other things, limit our
ability to incur additional indebtedness, restrict subsidiary dividends and distributions, limit our ability to
encumber certain assets and restrict our ability to issue capital stock of our subsidiaries. Our long-term
debt agreements permit us to pay dividends or repurchase our capital stock without any dollar limitation
provided that we would be in compliance with the financial covenants in our revolving credit facility after
giving effect to such dividend or repurchase. We were in compliance with the terms of our long-term debt
agreements at June 30, 2008, 2007 and 2006.
Contractual Obligations
We have obligations and commitments to make future payments under debt agreements and operating
leases. The following table details our financing obligations by due date:
Fiscal Year Ending June 30,
($000s) 2009 2010 2011 2012 2013 Thereafter Total
Short-term
borrowings (a) $ --- --- --- --- --- --- $ ---
Senior notes (b) --- --- --- 400,000 --- --- 400,000
Capital leases (d) 555 577 474 479 --- --- 2,085
Other long-term
obligations (b) 84 96 25,100 105 110 372 25,867
Firm commitments
for capital
expenditures 22,351 --- --- --- --- --- 22,351
Purchase
obligations (c) 198,302 19,011 2 --- --- --- 217,315
Non-cancelable
operating
leases (d) 43,776 38,104 29,002 18,295 18,367 33,988 181,532
Total contractual
cash obligations $265,068 57,788 54,578 418,879 18,477 34,360 $849,150
(a) See Note 5 to our consolidated financial statements.
(b) See Note 6 to our consolidated financial statements.
(c) Includes amounts committed under enforceable agreements for purchase of goods and services with
defined terms as to quantity, price and timing of delivery.
(d) See Note 8 to our consolidated financial statements.
Recent Developments
As previously announced, on June 30, 2008, Dr. Sidney Harman resigned as non-executive Chairman of
the Board. Dr. Harman continues to be a member of our Board of Directors. However, he does not
intend to stand for re-election to the Board at our next annual meeting. Dinesh Paliwal succeeded Dr.
Harman as Chairman of the Board effective July 1, 2008.
As previously announced, restructuring of the Company’s Automotive division footprint was accelerated
with the announcement of plant closings in Northridge, California and Martinsville, Indiana. The